EXECUTIVE SUMMARY:
Given the shortage of goods due to supply chain disruptions, gift cards are expected to be a popular holiday gift this year. While both givers and receivers enjoy gift cards, they’re no fun if a scammer manages to steal the funds before the intended recipient can claim them. During the first portion of 2021, more than 35,000 gift card scams were reported to the US Federal Trade Commission. Will 2021 be the worst year on record for gift card scams? 
Gift card scams come in many varieties. The majority of gift card scams prey on emotional vulnerabilities and attempt to pressure victims into paying for a good or a service via gift card. Other gift card scams leverage advanced technologies to rip off retailers and private citizens alike. Buyer beware!
This holiday season, ensure that you avoid falling for a gift card scam. Here are a series of common gift card scams to watch out for. Remember, no real enterprise, utility group or government agency will ever ask for you to pay for something via gift card!
- In one common scam, a cyber criminal feigning to work with the IRS will call you, text you or send threatening emails demanding that you provide money for unpaid taxes. You are asked to pay a specific sum with a gift card.In many instances, scammers ask for a gift card from a specific vendor. Once you provide the criminal with the gift card’s barcode number and PIN, the scammer will vanish.To achieve their ends, in some cases, scammers have threatened people with arrest if they don’t pay up. In reality, the IRS will never call you, text you or email you. In addition, the IRS will not threaten a person with arrest for taxes owed.
- A gift card scammer may say that they’re calling from Apple or Microsoft, or another large brand, and may tell you that there’s something wrong with your device. In turn, you must pay for a service in order to remedy the situation. Providing a gift card number is the best option, according to the scammer, because it’s the most secure. Avoid falling for this.
- Gift card scammers may not need you to buy them a gift card. In some cases, gift card scammers leverage vast networks of bots to scout out activated gift cards on retailers’ sites. Once a bot identifies a gift card, cyber criminals can use it to make purchases of their own. Alternatively, gift card scammers may take the numbers associated with activated gift card/s and may sell them on the dark web. You can avoid gift card bots by using up a gift card all at once, meaning that nothing is left for internet bots.
- Creative gift card scammers may pretend to be a friend or a family member dealing with an emergency. The person on the line will tell you that money is needed urgently. If unable to discern whether or not you’re speaking with a scammer or an actual contact of yours, end the phone call and dial the number of your friend/family member.
- If you work for a retailer, you should know that thieves can steal gift card numbers using a magstripe reader. Once the magstripe reader has been deployed, the cyber criminal can walk away with hundreds or thousands of dollars worth of gift card cash.These scams are difficult to spot, as the scammer may appear as though he/she is simply looking at the gift cards, and may then return them to the display. If a scammer gets away with this in your store, check the security cameras to find out who conducted the operations, and call authorities as needed.
- “You’ve won a prize!” says the scammer. The scammer may then tell you all about the prize, and may even try to foster a connection with you, only to then explain that you will need to pay $2.99 or another amount in order to claim the prize. Honest enterprises do not request for persons to pay for gift cards.
- Online auction websites are tempting places through which to purchase gift cards, yet a number of the cards sold on these sites don’t actually work. To avoid this type of scam, simply avoid purchasing gift cards via online auction sites and instead buy them from a traditional store.
- Is it really the utility company that’s calling? Scammers often pretend to be representatives from local utility service groups and may ask for you to pay a bill via gift card. Public utility companies do not permit payment via gift card and they also send letters in the mail rather than calling people.
- Speaking of mail, scammers may send you a check that appears to be from someone who you know. The amount marked on the check is for an unexpected sum of money. The scammer then says that you must deposit the check and provide them with a certain amount on a gift card. The US Federal Trade Commission notes that these checks are fake and that this type of scam can bankrupt.
If you are the target of a gift card scam, you can report the incident. This will help law enforcement stop scammers.
For more information about gift card scams and other holiday scams, click here. Lastly, get business and cyber security insights delivered straight to your inbox each week when you sign up for the CyberTalk.org newsletter.